Tuesday, September 23, 2014

Remodeling Always Makes Financial Sense...NOT

With a large number of homes for sale, many at amazingly low prices, investors are heading back in to the real estate market, and some adventurous first time investors are testing the waters.  With so many shows on the Discovery and HGTV, flipping is becoming trendy again, but do your research.  Remodeling can dramatically increase the quality of life for building occupants, but if you are considering a remodel strictly as an investment, think twice about it.

Remodeling is rarely a sound monetary investment.

According to a report published by Remodeling Magazine, most remodeling projects add only 60% to 80% of their cost to the home, and no projects, on average, yield any positive return. Home upgrades are thus more accurately described as consumer spending than as true investments, which ordinarily have a decent chance of seeing some kind of profit.
Source: Remodeling Magazine, 2008
 Project
% of Cost 
Recouped in Resale
deck addition
81.8%
minor kitchen remodel
79.5%
bathroom remodel
70.7%
master suite addition
66%
home office addition
54.6%

As the report deals only with averages, it is still possible for individual remodeling projects to yield positive returns. A wooden deck added to a mid-range house on the Pacific coast, for instance, will add more value than the construction costs nearly half of the time. Even the most wasteful of the projects analyzed by the study, such as the addition of a sunroom or a backup power generator, are bound to reap a profit in rare instances. Also, remodeling projects are more likely to be profitable in houses that are inexpensive for their neighborhood. But, by and large, remodeling projects should be undertaken to improve quality of life for household occupants, not strictly as monetary investments. While you will lose more than a third of what you put into a family room addition, for instance, maybe your family will enjoy the addition enough to more than counter its expense.

Remodeling is also a cheap alternative to house-swapping, which can cost 10% of your current house's value to real estate commissions, moving costs, and selling expenses. If your home update would cost less than the costs accrued by house-swapping, or if you can’t live outside your current neighborhood, the remodeling project might be worthwhile. If you do choose to remodel your house, as always, have the project inspected by an InterNACHI inspector.
Remodeling Mistakes
If you are committed to remodeling in order to add resale value to your home, avoid the following mistakes:
  • upgrading your house in any way that will make it bigger or fancier than most others in your neighborhood, as such remodels are unlikely to add much value;
  • adding pools or spas, as they repel as many buyers as they attract, in most markets. These upgrades often require maintenance that buyers don’t want to hassle with, and they pose a drowning risk to young children. Ask your InterNACHI inspector during your next inspection about remodeling projects that prospective buyers may find dangerous.
  • indulging in your personal tastes rather than aiming to please prospective buyers. Bold statements, such as brightly colored appliances, will repel many buyers.
  • trusting TV shows that are based on the premise that remodeling is a true monetary investment. These shows are successful if people watch them, not if their claims are based in reality. Buying anything at retail cost and hoping to resell it at a profit – especially in the future, when the item or project has become dated – is rarely a winning financial strategy.
Low-Cost Alternatives to Remodeling
Real estate agents often recommend the following fixes, as they are likely to return more than their cost:
  • Refurbish rather than replace. Refinishing or re-facing cabinets is usually less expensive than it costs to replace them. Re-glaze sinks and tubs to extend their lives and avoid the high price of replacing them.
  • Rethink how you use space. While adding floor space may seem like a reasonable way to deal with a space crunch, you can probably achieve the same result by ditching the clutter. An off-site storage unit can be used to free up space in your house.
  • Re-purpose a room. Never use the guest bedroom? Maybe you can turn it into an office or a dining room instead.
  • Paint. Paint can transform the look of a room or house, and it is inexpensive and relatively easy to apply. Hire a professional or do it yourself.
  • Brighten the house by removing heavy curtains, washing windows, and trimming back branches and bushes that cover windows.
  • Deep-clean. Scour your house from top to bottom.
  • Clean up landscaping. Trim bushes and hedges, rake leaves, clear downed branches, plant flowers and replace mulch.
  • Use staging techniques. Rearrange furniture and décor to highlight the positive aspects of the room and create an inviting space. While you can do this one your own, professional staging services are contracted to tweak color and furniture to create an emotional appeal. Consider that a large segment of prospective home buyers will preview homes on the Internet, and staging can dramatically enhance a first impression.

In summary, remodeling is often a bad investment strategy, and inexpensive alternatives may achieve the same end.


Friday, September 19, 2014

Three Deadly Mistakes Every Home Buyer Should Avoid

Thinking of buying a home?  Avoid these pitfalls for a successful start.

"No, honey, I'm sure it's fine.  Realtors and
home inspections are totally overrated."

Deadly Mistake #1: Thinking you can't afford it. 
  
Many people who thought that buying the home they wanted was simply out of their reach are now enjoying a new lifestyle in their very own homes.  
  
Buying a home is the smartest financial decision you will ever make.  In fact, most homeowners would be broke at retirement if it wasn't for one saving grace -- the equity in their homes.  Furthermore, tax allowances favor home ownership. 

Real estate values have always risen steadily.  Of course, there are peaks and valleys, but the long-term trend is a consistent increase.  This means that every month when you make a mortgage payment, the amount that you owe on the home goes down and the value typically increases.  This "owe less, worth more" situation is called equity build-up and is the reason you can't afford not to buy. 
  
Even if you have little money for a down payment or credit problems, chances are that you can still buy that new home.  It just comes down to knowing the right strategies, and working with the right people.  See below. 
  
  
Deadly Mistake #2: Not hiring a buyer's agent to represent you. 
  
Buying property is a complex and stressful task.  In fact, it is often the biggest, single investment you will make in your lifetime.  At the same time, real estate transactions have become increasingly complicated.  New technology, laws, procedures, and competition from other buyers require buyer agents to perform at an ever-increasing level of competence and professionalism.  In addition, making the wrong decisions can end up costing you thousands of dollars.  It doesn't have to be this way! 
  
Work with a buyer's agent who has a keen understanding of the real estate business and the local market.  A buyer's agent has a fiduciary duty to you.  That means that he or she is loyal only to you and is obligated to look out for your best interests.  A buyer's agent can help you find the best home, the best lender, and the best home inspector in your area.  That inspector should be an InterNACHI-certified home inspector because InterNACHI inspectors are the most qualified and  best-trained inspectors in the world.

Trying to buy a home without an agent or a qualified inspector is, well... unthinkable. 
  
  
Deadly Mistake #3: Getting a cheap inspection. 
  
Buying a home is probably the most expensive purchase you will ever make.  This is no time to shop for a cheap inspection.  The cost of a home inspection is small relative to the value of the home being inspected.  The additional cost of hiring a certified inspector is almost insignificant by comparison.  As a home buyer, you have recently been crunching the numbers, negotiating offers, adding up closing costs, shopping for mortgages, and trying to get the best deals.  Don't stop now!  Don't let your real estate agent, a "patty-cake" inspector, or anyone else talk you into skimping here.   
   
InterNACHI front-ends its membership requirements.  InterNACHI turns down more than half the inspectors who want to join because they can't fulfill the membership requirements.  
  
InterNACHI-certified inspectors perform the best inspections, by far.  InterNACHI-certified inspectors earn their fees many times over.  They do more, they deserve more and -- yes -- they generally charge a little more.  Do yourself a favor...and pay a little more for the quality inspection you deserve.


Wednesday, September 17, 2014

Living Big in Tiny Style

A growing number of homeowners in the U.S. are downsizing to homes smaller than 1,000 square feet, and, in some cases, smaller than 100 square feet. This transition to smaller homes, known as the Small House Movement, is adhered to by people who believe American houses in general are too large, wasteful and energy-inefficient.

While home sizes ballooned from the 1950s into the early 2000s, data suggests that this trend is slowing, or even reversing. A 2008 survey shows that more than 60% of potential home buyers would rather have a smaller house with more amenities than the other way around. Similarly, according to the National Association of Home Builders, 59% of builders nationwide said they were planning to or were already significantly downscaling from the "McMansion" era.

The disadvantages of downsizing are obvious:  you may have to get rid a lot of furniture, the new house is less prestigious, and you lose space for guests. Neighbors, too, might view your small home as a threat to their property values. But living small is nothing new.  After World War II, 1,000-square-foot homes were the norm for returning soldiers and their families.
Gayle Butler, editor-in-chief of Better Homes and Gardens, describes the Small House Movement as "right-sizing," rather than downsizing, as homeowners forgo unused space and buy homes that better fit their needs. Dee Williams, of Olympia, Washington, sold her 1,500-square-foot home and moved into an 84-square-foot home that she built herself. When the electric company began charging more for electricity, her bill doubled from $4 to $8, an increase that probably would have been more dramatic in her previous home.
Adherents to the Small House Movement enjoy the following perks of their transition:
  • increased cash flow. Smaller homes require a smaller mortgage, lower property taxes, and decreased homeowner’s insurance, maintenance costs, and the expense required to furnish the home. Owners might even be able to purchase a smaller house in cash using the proceeds from their existing home. And with the extra money, they can afford improved insulation, higher-quality windows and flooring, and luxuries such as solar roof panels and skylights;
  • less maintenance. Fewer rooms and smaller spaces cut down on the time needed to clean and maintain, leaving more hours in the day for more enjoyable activities;
  • lower utility bills. It costs a lot less to heat and cool a small home than a large home. Typically, there is no wasted space in vaults in a small home;
  • reduced consumption. If there is little space to store items, homeowners are much less likely to buy new things. Fewer rooms and windows mean less money spent on TVs and curtains, for instance;
  • more time with family. Less space means that more room must be shared, which encourages group activities and dinners.
While the benefits of the Small House Movement are clear, the transition isn’t easy for everyone, especially for those who have become accustomed to large houses. The following tips can help homeowners make do with less space:
  • Use items for more than one purpose. For example, you can use a trunk as a coffee table, placing in it items such as shoes, files, and extra sheets to save closet space.
  • Eliminate or cut down on extra silverware, pots, pans and dishes if the kids have moved out.
  • Use rooms for more than one purpose. You may be able to squeeze a small computer desk into the corner of a bedroom, and a rarely-used dining room can double as a library.
  • Purchase a stackable washer/dryer unit to save space.

In summary, median house sizes have begun to decline, spurred on by adherents to the Small House Movement.

Check out http://www.houseplans.com/collection/micro-cottages and http://www.tumbleweedhouses.com/pages/houses for some cool pics and plans!

Thursday, September 11, 2014

10 Easy Ways to Save Energy in Your Home

Most people don’t know how easy it is to make their homes run on less energy, and we want to change that. Drastic reductions in heating, cooling and electricity costs can be accomplished through very simple changes, most of which homeowners can do themselves. 

Why make your home more energy efficient? Here are a few good reasons:
  • Federal, state, utility and local jurisdictions' financial incentives, such as tax breaks, are very advantageous for homeowners in most parts of the U.S.
  • It saves money. It costs less to power a home that has been converted to be more energy-efficient.
  • It increases the comfort level indoors.
  • It reduces our impact on climate change. Many scientists now believe that excessive energy consumption contributes significantly to global warming.
  • It reduces pollution. Conventional power production introduces pollutants that find their way into the air, soil and water supplies.
1. Find better ways to heat and cool your house. 
As much as half of the energy used in homes goes toward heating and cooling. The following are a few ways that energy bills can be reduced through adjustments to the heating and cooling systems:
  • Install a ceiling fan. Ceiling fans can be used in place of air conditioners, which require a large amount of energy.
  • Periodically replace air filters in air conditioners and heaters.
  • Set thermostats to an appropriate temperature. Specifically, they should be turned down at night and when no one is home. In most homes, about 2% of the heating bill will be saved for each degree that the thermostat is lowered for at least eight hours each day. Turning down the thermostat from 75° F to 70° F, for example, saves about 10% on heating costs.
  • Install a programmable thermostat. A programmable thermostat saves money by allowing heating and cooling appliances to be automatically turned down during times that no one is home and at night. Programmable thermostats contain no mercury and, in some climate zones, can save up to $150 per year in energy costs.
  • Install a wood stove or a pellet stove. These are more efficient sources of heat than furnaces.
  • At night, curtains drawn over windows will better insulate the room.
2. Install a tankless water heater.
Demand-type water heaters (tankless or instantaneous) provide hot water only as it is needed. They don't produce the standby energy losses associated with traditional storage water heaters, which will save on energy costs. Tankless water heaters heat water directly without the use of a storage tank. When a hot water tap is turned on, cold water travels through a pipe into the unit. A gas burner or an electric element heats the water. As a result, demand water heaters deliver a constant supply of hot water. You don't need to wait for a storage tank to fill up with enough hot water.
3. Replace incandescent lights.
The average household dedicates 11% of its energy budget to lighting. Traditional incandescent lights convert approximately only 10% of the energy they consume into light, while the rest becomes heat. The use of new lighting technologies, such as light-emitting diodes (LEDs) and compact fluorescent lamps (CFLs), can reduce the energy use required by lighting by 50% to 75%. Advances in lighting controls offer further energy savings by reducing the amount of time that lights are on but not being used. Here are some facts about CFLs and LEDs:
  • CFLs use 75% less energy and last about 10 times longer than traditional incandescent bulbs.
  • LEDs last even longer than CFLs and consume less energy.
  • LEDs have no moving parts and, unlike CFLs, they contain no mercury.
4. Seal and insulate your home.
Sealing and insulating your home is one of the most cost-effective ways to make a home more comfortable and energy-efficient, and you can do it yourself. A tightly sealed home can improve comfort and indoor air quality while reducing utility bills. An InterNACHI energy auditor can assess  leakage in the building envelope and recommend fixes that will dramatically increase comfort and energy savings.
The following are some common places where leakage may occur:
  • electrical receptacles/outlets;
  • mail slots;
  • around pipes and wires;
  • wall- or window-mounted air conditioners;
  • attic hatches;
  • fireplace dampers;
  • inadequate weatherstripping around doors;
  • baseboards;
  • window frames; and
  • switch plates.
Because hot air rises, air leaks are most likely to occur in the attic. Homeowners can perform a variety of repairs and maintenance to their attics that save them money on cooling and heating, such as: 
  • Plug the large holes. Locations in the attic where leakage is most likely to be the greatest are where walls meet the attic floor, behind and under attic knee walls, and in dropped-ceiling areas.
  • Seal the small holes. You can easily do this by looking for areas where the insulation is darkened. Darkened insulation is a result of dusty interior air being filtered by insulation before leaking through small holes in the building envelope. In cold weather, you may see frosty areas in the insulation caused by warm, moist air condensing and then freezing as it hits the cold attic air. In warmer weather, you’ll find water staining in these same areas. Use expanding foam or caulk to seal the openings around plumbing vent pipes and electrical wires. Cover the areas with insulation after the caulk is dry.
  • Seal up the attic access panel with weatherstripping. You can cut a piece of fiberglass or rigid foamboard insulation in the same size as the attic hatch and glue it to the back of the attic access panel. If you have pull-down attic stairs or an attic door, these should be sealed in a similar manner.
5. Install efficient showerheads and toilets.
The following systems can be installed to conserve water usage in homes:
  • low-flow showerheads. They are available in different flow rates, and some have a pause button which shuts off the water while the bather lathers up;
  • low-flow toilets. Toilets consume 30% to 40% of the total water used in homes, making them the biggest water users. Replacing an older 3.5-gallon toilet with a modern, low-flow 1.6-gallon toilet can reduce usage an average of 2 gallons-per-flush (GPF), saving 12,000 gallons of water per year. Low-flow toilets usually have "1.6 GPF" marked on the bowl behind the seat or inside the tank;
  • vacuum-assist toilets. This type of toilet has a vacuum chamber that uses a siphon action to suck air from the trap beneath the bowl, allowing it to quickly fill with water to clear waste. Vacuum-assist toilets are relatively quiet; and
  • dual-flush toilets. Dual-flush toilets have been used in Europe and Australia for years and are now gaining in popularity in the U.S. Dual-flush toilets let you choose between a 1-gallon (or less) flush for liquid waste, and a 1.6-gallon flush for solid waste. Dual-flush 1.6-GPF toilets reduce water consumption by an additional 30%.
6. Use appliances and electronics responsibly.
Appliances and electronics account for about 20% of household energy bills in a typical U.S. home. The following are tips that will reduce the required energy of electronics and appliances:
  • Refrigerators and freezers should not be located near the stove, dishwasher or heat vents, or exposed to direct sunlight. Exposure to warm areas will force them to use more energy to remain cool.  
  • Computers should be shut off when not in use. If unattended computers must be left on, their monitors should be shut off. According to some studies, computers account for approximately 3% of all energy consumption in the United States.
  • Use efficient ENERGY STAR-rated appliances and electronics. These devices, approved by the U.S. Department of Energy and the Environmental Protection Agency’s ENERGY STAR Program, include TVs, home theater systems, DVD players, CD players, receivers, speakers, and more. According to the EPA, if just 10% of homes used energy-efficient appliances, it would reduce carbon emissions by the equivalent of 1.7 million acres of trees.
  • Chargers, such as those used for laptops and cell phones, consume energy when they are plugged in. When they are not connected to electronics, chargers should be unplugged.
  • Laptop computers consume considerably less electricity than desktop computers.
7. Install daylighting as an alternative to electrical lighting.
Daylighting is the practice of using natural light to illuminate the home's interior. It can be achieved using the following approaches:
  • skylights. It’s important that they be double-pane or they may not be cost-effective. Flashing skylights correctly is key to avoiding leaks;
  • light shelves. Light shelves are passive devices designed to bounce light deep into a building. They may be interior or exterior. Light shelves can introduce light into a space up to 2½ times the distance from the floor to the top of the window, and advanced light shelves may introduce four times that amount;
  • clerestory windows.  Clerestory windows are short, wide windows set high on the wall. Protected from the summer sun by the roof overhang, they allow winter sun to shine through for natural lighting and warmth; and 
  • light tubes.  Light tubes use a special lens designed to amplify low-level light and reduce light intensity from the midday sun. Sunlight is channeled through a tube coated with a highly reflective material, and then enters the living space through a diffuser designed to distribute light evenly.
8. Insulate windows and doors.
About one-third of the home's total heat loss usually occurs through windows and doors. The following are ways to reduce energy lost through windows and doors:
  • Seal all window edges and cracks with rope caulk. This is the cheapest and simplest option.
  • Windows can be weatherstripped with a special lining that is inserted between the window and the frame. For doors, apply weatherstripping around the whole perimeter to ensure a tight seal when they're closed. Install quality door sweeps on the bottom of the doors, if they aren't already in place.
  • Install storm windows at windows with only single panes. A removable glass frame can be installed over an existing window.
  • If existing windows have rotted or damaged wood, cracked glass, missing putty, poorly fitting sashes, or locks that don't work, they should be repaired or replaced.
9. Cook smart.
An enormous amount of energy is wasted while cooking. The following recommendations and statistics illustrate less wasteful ways of cooking:
  • Convection ovens are more efficient that conventional ovens. They use fans to force hot air to circulate more evenly, thereby allowing food to be cooked at a lower temperature. Convection ovens use approximately 20% less electricity than conventional ovens.
  • Microwave ovens consume approximately 80% less energy than conventional ovens.
  • Pans should be placed on the matching size heating element or flame. 
  • Using lids on pots and pans will heat food more quickly than cooking in uncovered pots and pans.
  • Pressure cookers reduce cooking time dramatically.
  • When using conventional ovens, food should be placed on the top rack. The top rack is hotter and will cook food faster. 
10. Change the way you do laundry.
  • Do not use the medium setting on your washer. Wait until you have a full load of clothes, as the medium setting saves less than half of the water and energy used for a full load.
  • Avoid using high-temperature settings when clothes are not very soiled. Water that is 140° F uses far more energy than 103° F for the warm-water setting, but 140° F isn’t that much more effective for getting clothes clean.
  • Clean the lint trap every time before you use the dryer. Not only is excess lint a fire hazard, but it will prolong the amount of time required for your clothes to dry.
  • If possible, air-dry your clothes on lines and racks.
  • Spin-dry or wring clothes out before putting them into a dryer. 
Homeowners who take the initiative to make these changes usually discover that the energy savings are more than worth the effort.  Your wallet will thank you.  The planet will thank you.

Tuesday, September 2, 2014

15 Tools Every Homeowner Should Own

The following items are essential tools, but this list is by no means exhaustive. Feel free to ask an InterNACHI inspector during your next inspection about other tools that you might find useful. 


1.  Plunger

A clogged sink or toilet is one of the most inconvenient household problems that you will face. With a plunger on hand, however, you can usually remedy these plumbing issues relatively quickly. It is best to have two plungers -- one for the sink and one for the toilet.

2.  Combination Wrench Set
One end of a combination wrench set is open and the other end is a closed loop. Nuts and bolts are manufactured in standard and metric sizes, and because both varieties are widely used, you’ll need both sets of wrenches. For the most control and leverage, always pull the wrench toward you, instead of pushing on it. Also, avoid over-tightening.

3.  Slip-Joint Pliers
Use slip-joint pliers to grab hold of a nail, a nut, a bolt, and much more. These types of pliers are versatile because of the jaws, which feature both flat and curved areas for gripping many types of objects. There is also a built-in slip-joint, which allows the user to quickly adjust the jaw size to suit most tasks.

4.  Adjustable Wrench
Adjustable wrenches are somewhat awkward to use and can damage a bolt or nut if they are not handled properly. However, adjustable wrenches are ideal for situations where you need two wrenches of the same size. Screw the jaws all the way closed to avoid damaging the bolt or nut.

5.  Caulking Gun
Caulking is the process of sealing up cracks and gaps in various structures and certain types of piping. Caulking can provide noise mitigation and thermal insulation, and control water penetration. Caulk should be applied only to areas that are clean and dry. 

6.  Flashlight
None of the tools in this list is of any use if you cannot visually inspect the situation. The problem, and solution, are apparent only with a good flashlight. A traditional two-battery flashlight is usually sufficient, as larger flashlights may be too unwieldy.

7.  Tape Measure
Measuring house projects requires a tape measure -- not a ruler or a yardstick. Tape measures come in many lengths, although 25 feet is best.  Measure everything at least twice to ensure accuracy. 
 
8.  Hacksaw
A hacksaw is useful for cutting metal objects, such as pipes, bolts and brackets. 
Hacksaws look thin and flimsy, but they’ll easily cut through even the hardest of metals. Blades are replaceable, so focus your purchase on a quality hacksaw frame.

9. Torpedo Level
Only a level can be used to determine if something, such as a shelf, appliance or picture, is correctly oriented. The torpedo-style level is unique because it not only shows when an object is perfectly horizontal or vertical, but it also has a gauge that shows when an object is at a 45-degree angle. The bubble in the viewfinder must be exactly in the middle -- not merely close.

10.  Safety Glasses / Goggles
For all tasks involving a hammer or a power tool, you should always wear safety glasses or goggles. They should also be worn while you mix chemicals.

11.  Claw Hammer
A good hammer is one of the most important tools you can own.  Use it to drive and remove nails, to pry wood loose from the house, and in combination with other tools. They come in a variety of sizes, although a 16-ounce hammer is the best all-purpose choice.

12.  Screwdriver Set
It is best to have four screwdrivers: a small and large version of both a flathead and a Phillips-head screwdriver. Electrical screwdrivers are
 sometimes convenient, but they're no substitute.  Manual screwdrivers can reach into more places and they are less likely to damage the screw. 
13.  Wire Cutters

Wire cutters are pliers designed to cut wires and small nails. The side-cutting style (unlike the stronger end-cutting style) is handy, but not strong enough to cut small nails.

14.  Respirator / Safety Mask
While paints and other coatings are now manufactured to be less toxic (and lead-free) than in previous decades, most still contain dangerous chemicals, which is why you should wear a mask to avoid accidentally inhaling. A mask should also be worn when working in dusty and dirty environments. Disposable masks usually come in packs of 10 and should be thrown away after use. Full and half-face respirators can be used to prevent the inhalation of very fine particles that ordinary face masks will not stop. 
15.  Duct Tape

This tape is extremely strong and adaptable. Originally, it was widely used to make temporary repairs to many types of military equipment. Today, it’s one of the key items specified for home emergency kits because it is water-resistant and extremely sticky.